CriticalControl Solutions Corp. (“CriticalControl” or the “Corporation”) (TSX:CCZ) has closed the sale of a portion of its non-energy business, previously announced on March 16, 2015, for gross proceeds of $1.7 million on March 27, 2015 as an asset sale. The business sold consisted of reselling imaging equipment, preventative maintenance contracts and third party document imaging software (the “Equipment Business”). Under the terms of the sale, all accounts receivable, liabilities and other working capital associated with the business prior to the sale have been retained by CriticalControl.
“We are moving rapidly to focus our core business and complete our strategic review in a timely manner,” said Alykhan Mamdani, President and CEO of CriticalControl. “The proceeds from this divestiture will be used to fund the Corporation’s strategic initiatives and geographic expansion in the United States.”
In a press release dated March 2, 2015, CriticalControl announced that it is reviewing strategic alternatives with respect to its non-energy services business, which comprised 33% of the Corporation’s revenue in 2013. This business segment consists of three components: The Equipment Business; Eastern Canada Conversion (consisting of document imaging and data entry services in Quebec, Ontario and Winnipeg), which was divested pursuant to a press release dated March 12, 2015 for $1 Million; and Western Canada Conversion (consisting of document imaging, data entry and business process outsourcing services in Alberta).
The Equipment Business represents approximately 31% of the Corporation’s revenue from its non-energy services business in 2013 (10% of total revenue in 2013). CriticalControl continues to investigate strategic alternatives related to the Western Canada Conversion business and expects to conclude its process by the end of May 2015.
Forward Looking Statements
Although the Corporation is evaluating strategic alternatives for its Western Canada Conversion business, there is no assurance that the process will result in a divestiture of any portion of the remaining business. Notwithstanding expectations of the review being completed by the end of May 2015, once further information is obtained, the Corporation may choose to terminate the process early or extend the process where appropriate.
Proceeds from the divestiture together with freed up working capital is expected to be used in strategic initiatives and geographic expansion. Expectations are subject to change as management monitors the progress of its strategic initiatives. There can be no assurance that geographic expansion opportunities will be available as expectedto invest the proceeds from this divestiture.
CriticalControl provides solutions for the collection, control and analysis of measurement and operational data related to oil and gas wells across North America. We provide services to capture the data, cloud-based software to visualize and manage it and the business intelligence to make quicker and more informed operational decisions.